Thursday, September 6, 2007

Test of Sincerity is Between the Lines

On 4th September, 2007 Donald Tsang hosted a forum to consult university students from the mainland, Hong Kong and overseas on his upcoming policy address. If one reads between the lines of the CE’s speech and responses to questions from students, one could not help but come away with the impression that the administration is still trapped in its old mindset: “do not rock the boat”.

On the subject of Hong Kong’s gaping wealth gap and poverty, the CE started off in defensive mode, saying that such a challenge is universal in all developed economies, particularly in the renowned financial centres like London and New York. He then made it clear that it is not the government’s business to arbitrarily redistribute income. In other words, government should do nothing to prevent the rich from getting richer, but rather should make sure that the poor will not get poorer. My question is: if the rich and super-rich are forever getting larger and larger portions of the economic pie, what modicum of it, if any, will be left for the working class and the downtrodden in society?

According to government statistics, the average annual rate of change in the Real Wage Index between the years 2001 and 2006 is 0.1% per annum, whereas during the same period Hong Kong’s GDP per capita enjoyed a 5.1% per annum growth. The Real Wage Index covers workers at supervisory, technical, clerical, craftsman and operative levels and is inflation-adjusted. Doesn’t that huge gap between wage and economic growth tell us something that government may be too embarrassed to admit? Should the bar benders and social workers be blamed for wanting to share that spectacular economic growth, especially when already highly-paid civil servants have been allowed corresponding pay raises and shorter work weeks?

There is a Chinese adage that goes: “If you want to know what goes on in a person’s mind, you only have to listen to his spoken words.” (欲知心中事, 但聽口中言), From Tsang’s words, one might have a fairly good guess that the administration is not about to tackle the wealth gap, as Tsang indicated that redistribution of income is not an option, nor is it very serious about dealing with poverty, as Tsang kept evading the minimum wage issue at the forum. His pledge not to allow cross-generation poverty seems so empty.....

Tsang likes to compare Hong Kong with cities like New York and London. Let us compare the actions of Hong Kong and those of New York on their separate attempt to tackle the issue of poverty.

It took the Commission on Poverty, established in 2005, two whole years just to come up with a long-winded Report, which was released on 14th June, 2007. Other than talking over and over again about the meaning of poverty and classifying the poor into several categories like the unemployed, the working poor, children, youth and the elderly, the Report was short on delivering creative ways of solving the problem.

In the concluding passage of the Executive Summary, it says “The Commission believes that poverty issues are becoming increasingly complicated and can no longer be satisfactorily resolved by the efforts of any one sector alone. Joint efforts from the community, the Third sector, the private sector and across the government are required to search for more sustainable partnerships and innovative solutions.”

Lots of words on paper followed by more words and scant action over a span of two years.

In contrast, as described in this article by Reid Cramer of the New America Foundation, since announcing government’s initiatives to tackle poverty last December, New York mayor Michael Bloomberg has formed in March this year a public-private partnership with US$50 million in funds raised from a number of foundations for the purpose of launching some pilot programs. Bloomberg pledged US$150 million a year to the poverty project, with some of the required funds to be raised from the private sector. The money is earmarked for testing out innovative programs including a new conditional cash transfer (CCT) incentive program which would allow the unemployed to invest in their own future, replacing the traditional dole-out welfare aid system. It will also be used to set up a Center for Economic Opportunity, which is charged with R & D functions as well as program evaluation responsibility.

Words followed by money and action within a matter of months.

Who is the more sincere one here?

It looks like Hong Kong workers and grassroots only have themselves to rely on to initiate any changes to livelihood issues.